BILL ANALYSIS Ó
AB 199
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Date of Hearing: August 19, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
199 (Eggman) - As Amended August 18, 2015
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|Policy |Natural Resources |Vote:|9 - 0 |
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| |Revenue and Taxation | |9 - 0 |
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Urgency: Yes State Mandated Local Program: NoReimbursable: No
SUMMARY:
This urgency bill expands the sales and use tax exclusion (STE)
under the California Alternative Energy and Advanced
Transportation Financing Authority (CAEATFA) to include projects
that process or use recycled feedstock. Specifically, this
AB 199
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bill:
1)Expands the definition of a "project" eligible for the STE to
include tangible personal property if at least 50% of its use
is to either process recycled feedstock intended to be reused
in the production of another product or if it uses recycled
feedstock in the production of another product or soil
amendment.
2)Provides projects do not include tangible personal property
that processes or uses recycled feedstock in a manner that
would constitute disposal, as defined.
3)Defines "recycled feedstock" as material that would otherwise
be destined for disposal, having completed its intended use
and product lifecycle.
4)Defines "soil amendments" to include compost, gypsum, and
phosphatic sulfide, as defined or a substance distributed for
the purpose of promoting plant growth or improving the quality
of crops by conditioning soils through physical means.
5)Sunsets January 1, 2021.
FISCAL EFFECT:
AB 199
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Although there may be the potential redirection of CAEATFA funds
resulting from the eligibility expansion, the total impact of
all CAEATFA-approved STEs to the General Fund is limited to $100
million annually. Further, according to CAEATFA, all projects
that are approved for the STE have demonstrated that any costs
to the state will be offset by the increased economic activity
created by the project.
COMMENTS:
1)Purpose. According to the author, by targeting materials that
would otherwise be landfilled or exported for recycling
overseas, this bill creates a multiplier effect in terms of
job creation and tax revenue.
2)Background. CAEATFA is authorized to provide eligible
projects with financial assistance in the form of a STE on
property used for the design, manufacture, production, or
assembly of advanced transportation technologies or
alternative energy source products, components or systems, as
prescribed. To date, CAEATFA has approved financial
assistance to private entities for projects that include:
electric vehicle manufacturing, solar photovoltaic
manufacturing, landfill gas capture and production, biogas
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capture and production (at dairies and waste water treatment
plants), demonstration hydrogen fuel production, electric
vehicle battery manufacturing, and biomass processing and fuel
production.
Applicants must meet criteria developed by CAEATFA. In order
to qualify for a STE, the applicant must demonstrate that the
property to be purchased will be used to design, manufacture,
produce, or assemble an eligible advanced transportation
technology or alternative source product - including energy
efficiency - component or system. Eligible projects must meet
evaluation criteria relating to the fiscal and environmental
benefits of the project and to compare those benefits to the
cost of the STE. While there are no maximum or minimum limits
on individual STEs, the program is limited to $100 million
annually.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081